OR: Grower Gets Bend’s First Recreational Pot License

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Deschutes County expects a wave of marijuana businesses will apply for licenses from the Oregon Liquor Control Commission to grow, process and sell recreational marijuana, once the county ban on marijuana businesses is lifted Sept. 1.

“My best ballpark guess is 25 to 50 applications over the first month or two based on our conversations with folks in the industry and their legal representatives,” Nick Lelack, director of the county Community Development Department, wrote in an email Tuesday.

Lifting the ban, an action the three-member County Commission took Monday, will allow growers, processors, wholesalers and retailers to put in their applications with the OLCC for recreational marijuana licenses.

The commissioners’ decision puts Deschutes, Hood River and Wasco counties alone in Central and Eastern Oregon in allowing commercial, recreational marijuana. In all, 19 Oregon counties, including Deschutes, and 86 municipalities have opted out of allowing recreational marijuana businesses, according to the OLCC. Of those, six counties and 46 municipalities plan to put the question before voters in November.

The expected first wave of license applicants from Deschutes County would join 43 marijuana businesses from Bend with applications already pending at the OLCC as of Monday. That’s an increase of 13 applications from Bend since mid-July. No marijuana businesses in the unincorporated parts of the county may apply until they obtain a land use compatibility statement, required by the state and issued by the county. Lelack said his department could not issue that document until Sept. 1.

As of Thursday, only one marijuana business in the entire county, an indoor grower in Bend, had received a commercial license from the OLCC. Patrick Todd, a longtime building contractor, was issued a license July 29. Todd’s business, GXO Inc., operates a 10,000-square-foot indoor marijuana farm as Green Cross Specialties in a light-industrial area in northeast Bend.

“It’s a well-oiled machine,” he said Tuesday.

The unmarked, gray, one-story warehouse surrounded by a chain-link fence shows no outward sign of its purpose. In the parking lot, the tell-tale aroma of marijuana is faint. Inside, rows of marijuana plants inch taller in seven clean, white flowering rooms under the glare of grow lights. Every nine days, one room of mature plants are moved out for trimming and new plants take their place, Todd said.

As a custom-home builder, he said, business suffered during the recession. As the holder of a medical marijuana card since the early 2000s, he was well-known in the cannabis community and found work there building indoor farms. It was the fastest-growing business in construction at the time, he said.

By 2014, Todd said, he had decided to get into that business himself. County records show his company purchased the 20,000-square-foot building in 2016 for $690,000. He financed the purchase but poured his own resources into converting the property into a cannabis farm. Todd’s operation is the largest permitted indoors by state regulations. He employs about 10 workers full-time and plans on hiring another dozen for part-time work.

“There are a lot of expenses associated with indoor grows and getting them set up,” he said. “I absorbed the expense and did the work myself.”

Todd said he plans on applying for a processor license that would allow his company to produce edible and drinkable products infused with marijuana extracts. Only one other processor application is pending in Bend. Twenty-three Bend businesses have applied for licenses to grow marijuana commercially for the recreational market. Another 13 have applied for retail licenses and six have applied for wholesale licenses. Some may overlap. Todd said applicants should expect a thorough review by OLCC.

“The biggest aspect of getting a license from the OLCC is keeping your business in line, being prepared,” he said. “It’s nothing more than jumping through hoops. They do a good job.”

Rustin Kluge, founder of Canna Tea LLC, now doing business as Ruby Farms, in Alfalfa, is also building an indoor growing facility. Like other marijuana business owners in unincorporated parts of Deschutes County, progress has been on hold while the County Commission debated the issue. Wednesday, Kluge said he’s still months away from having a production facility up and running. He plans on applying for a producer’s license.

“There’s a long-term business plan for our company, and we’re kinda being patient,” he said.

Kluge said he doesn’t believe the county will see as many marijuana business applications as Lelack said he expects. The rigorous application process, on top of the regulatory requirements and the hurdles facing the business, from lack of banking services to reluctance on the part of other professionals to work with marijuana firms, will weed out many would-be entrepreneurs.

Deschutes County regulations limit commercial marijuana growers to exclusive farm use, multiple use agriculture and rural industrial zones. The Oregon Health Authority does not share detailed information about medical marijuana growers, but Lelack estimated the county has between 1,500 and 1,600 growers, most of them with a small number of plants. Most large marijuana growers in the county are clustered around Tumalo, the area just east of Bend, and Alfalfa, where water is available, Lelack said.

“We’ve heard of some interest (in the area) north of Redmond and in greater Terrebonne,” he said. “We know there are existing medical grow sites in the south county and Sisters area as well.”

To lobby on behalf of its members in Deschutes County, the Oregon Cannabis Association mobilized its Central Oregon membership to urge the commissioners to lift the ban, said Amy Margolis, a Portland attorney and association director. That effort included manning phone banks, gathering signatures and turning out for committee and commission meetings, she said. The association also conducted a poll, paid for by local marijuana businesses, that found 61 percent of registered county voters favored “reasonable regulations” on marijuana businesses in the county.

“A lot of members out there invested in this (effort to lift the ban) being successful,” Margolis said Wednesday. “We had a plan that was executed by ground troops and it went really well. We’re pleased.”

Hunter Neubauer, co-founder and partner at Oregrown Industries Inc., was a local leader in that campaign. Oregrown, which operates a marijuana dispensary on Wall Street in Bend, invested about $1 million in turning a former goat farm and cheese factory near Tumalo into a marijuana growing and processing plant. Until the county passed its own regulations and lifted the ban, that investment made little return, he said. He said the company employs about 30 people at its operations in Bend, Boring and Deschutes County.

“It’s been a difficult eight months with the delay. It’s a big weight to carry with a local government that didn’t jump on the bandwagon right away,” Neubauer said Wednesday. “That (lifting) of the opt-out was critical in the development of economic growth, job creation and just the whole industry.”

News Moderator: Katelyn Baker
Full Article: Grower Gets Bend’s First Recreational Pot License
Author: Joseph Ditzler
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